Charter school leader, others take pay cuts to help budget
Prairie Crossing Charter School's director and other administration office employees have agreed to pay cuts to help negate a projected $100,000 in extra annual interest expenses associated with a loan.
Myron Dagley, the Grayslake charter school's director, is among those taking a salary hit for the 2009-10 academic year. Dagley said he agreed to have his annual pay reduced from $100,000 to $90,000.
"What we were able to do was out of dedication to Prairie Crossing Charter School," Dagley said Thursday.
Prairie Crossing, which serves kindergarten through eighth grade, is one of 35 small choice schools in Illinois. It is Lake County's only charter school.
Wall Street downgrades in Wisconsin-based Marshall & Ilsley Corp.'s credit rating - or financial confidence indicator - is what's behind Prairie Crossing's need to find additional cost savings.
M&I sold tax-exempt bonds allowing Prairie Crossing to obtain a $10 million loan a couple of years ago. The deal was supposed to save Prairie Crossing $150,000 in annual interest, with the only risk being a credit-rating cut on M&I.
As it turned out earlier this year, Fitch Ratings and Standard & Poor's downgraded M&I's credit worthiness. The downgrades led to higher yearly interest costs for Prairie Crossing, expected to be at minimum $100,000.
Before the school year started last week, charter school board members voted to freeze pay for all 64 employees as part of an effort to fill the $100,000 hole in a $2.8 million budget. Dagley said further budget reductions recently became necessary.
In addition to the pay cuts for Dagley and two other employees for 2009-10, Prairie Crossing will trim planned expenditures on classroom furniture and supplies. Other cash will be saved by making all teaching assistants seven-hour-a-day employees, Dagley said.
In a report issued this week, Prairie Crossing board member Steve Achtemeier said the school is working with Lake Forest Bank to find a replacement for M&I and restructure financing for the $10 million loan.
Prairie Crossing, which had 358 students as of last week, is within the boundaries of Woodland Elementary District 50 and Fremont Elementary District 79. The school has an environmentally focused curriculum and is free for the Woodland and Fremont pupils, but enrollment is determined by lottery. Dagley wrote in a report the school's financial picture "is being made tighter each week that lapses" without a deal to end the higher interest payments now required.
Prairie Crossing paid $68,000 in additional interest in the 2008-09 academic year.